A key component when purchasing a property at a Trustee Sale (or any sale for that matter) is to research the chain of title. You can typically purchase a ‘”limited title report” for $80.00 to $110.00.
The purpose of this title report is to ensure several things. One, we want to confirm that the foreclosing lender is in first position and secondly are there any property tax, mechanic or IRS liens attached to the property.
Trustee Sales require no emotional feelings. One way to look at it, is you’re buying the liens on the home, not the home itself. If there is a lien on the property you are not aware of, and have the winning bid, you will be responsible for all liens tied to the property.
IRS liens have redemption rights. Although they are not as common as the other liens mentioned, they do exist. The IRS can seize the property 120 days of notification of the Trustee Sale. It is important to note the word “notified” and not “after a winning bid”. The IRS could actually seize the property within a few days after a purchase has taken place at the Trustee Sale.
Verifying liens can be somewhat tricky, especially mechanics liens. Once you verify the lien you will then have to locate the contractor and try to reach a settlement prior to bidding on the property. You also might consider the services of an attorney at this point. If this doesn’t work or you feel uncomfortable, passing on the property might be your best option.
A home going to foreclosure almost always has State property tax liens. These liens usually don’t hurt the profit margin of the investor. They also do not need to be paid up front at the time of the Trustee sale. This type of lien usually has less cost factors than the other types of liens.
Trustee Sales in Arizona can help investors and homeowners gets great prices on homes in the Phoenix area but you need to do a little homework regarding the value of the property and the liens being purchased and acquired by the successful bidder.
With the over-correcting of property prices due to the boom in 2005, buying Arizona Real Estate can be a fruitful experience. Arizona has some of the lowest prices per square foot in the nation.
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